Fragmenting Markets

Darrell Duffie

ISBN 10: 3110673029 / ISBN 13: 9783110673029

Published by De Gruyter, De Gruyter Nov 2022, 2022

About this Item

Neuware -Post-crisis capital regulations and new failure-resolution rules increased the funding costs that are borne by bank shareholders, and thus the cost to buy-side firms for access to space on the balance sheets of large banks. A policy implication is the encouragement of market infrastructure and trading methods that reduce the amount of space on bank balance sheets that is needed to conduct a given amount of trade.Using models and evidence, this book addresses the implications for financial-market liquidity of these regulations for systemically important banks and argues that current rules do not allow for potential levels of market efficiency and financial stability. In this insightful analysis of the impact of regulation on financial market efficiency post-2008, the author argues that bank capital levels could actually be pushed higher while still improving the liquidity of markets for safe assets such as low-risk fixed-income instruments by relaxing the leverage-ratio rule and increasing risk-based capital requirements.Walter de Gruyter GmbH, Genthiner Strasse 13, 10785 Berlin 94 pp. Englisch.

Seller Inventory # 9783110673029

Bibliographic Details

• Title: Fragmenting Markets
• Publisher: De Gruyter, De Gruyter Nov 2022
• Publication Date: 2022
• Language: English
• ISBN 10: 3110673029
• ISBN 13: 9783110673029
• Binding: Buch
• Condition: Neu
• Dimensions: 246W x 175H x 12D millimeters 246 millimeters width by 175 millimeters height by 12 millimeters depth
• Weight: 373 grams

About this title

Synopsis

Post-crisis capital regulations and new failure-resolution rules increased the funding costs that are borne by bank shareholders, and thus the cost to buy-side firms for access to space on the balance sheets of large banks. A policy implication is the encouragement of market infrastructure and trading methods that reduce the amount of space on bank balance sheets that is needed to conduct a given amount of trade.

Using models and evidence, this book addresses the implications for financial-market liquidity of these regulations for systemically important banks and argues that current rules do not allow for potential levels of market efficiency and financial stability. In this insightful analysis of the impact of regulation on financial market efficiency post-2008, the author argues that bank capital levels could actually be pushed higher while still improving the liquidity of markets for safe assets such as low-risk fixed-income instruments by relaxing the leverage-ratio rule and increasing risk-based capital requirements.

About the Authors

Darrell Duffie, Adams Distinguished Professor of Management and Professor of Finance, Stanford University, USA

Darrell Duffie is the The Adams Distinguished Professor of Management and Professor of Finance at Stanford Graduate School of Business. He is a fellow and member of the Council of the Econometric Society, a research fellow of the National Bureau of Economic Research, and a fellow of the American Academy of Arts and Sciences. Duffie was the 2009 president of the American Finance Association. In 2014, he chaired the Market Participants Group, charged by the Financial Stability Board with recommending reforms to Libor, Euribor, and other interest rate benchmarks.